FSC Channeling Inner Firewall: South Korea Drafts Cybersecurity Glow-Up After Crypto Hacks

South Korea's Financial Services Commission announced plans to tighten cybersecurity requirements across the financial sector after an industry-wide review exposed deficiencies at 130 of 555 financial companies, including crypto firms. The proposed reforms follow investigations into security incidents affecting 16 companies that compromised roughly 100,000 pieces of customer information, including names, contact details and identification numbers.

Among the affected firms are Streami, the operator of crypto exchange Gopax, and trading platform Prabang, which disclosed that an Oct. 2 hack exposed personal information belonging to some of its customers. The data exposure has prompted the FSC to push for stronger accountability measures targeting executives at firms found to have inadequate security controls.

Under the draft framework, larger financial institutions would be required to undergo vulnerability assessments at least twice per year. The FSC also plans to expand information-sharing systems between financial entities and regulators, and is evaluating the use of artificial intelligence tools to bolster security monitoring for smaller companies. Regulators additionally floated the option of authorizing cybersecurity inspections outside regular assessment schedules when urgent threats emerge.

The FSC said investigators are still determining whether the various incidents involved the use of AI or were connected to the same attackers. The cybersecurity overhaul arrives alongside separate efforts by South Korean authorities to restrict access to unregistered crypto platforms, including recent moves to block 27 crypto-related websites.